The latest Gloucester Rugby accounts have revealed that the club have made a £5.3m profit following the £12.8m investment from CVC.
Gloucester turn a profit…
Gloucester typically lose money in recent times. This financial year is different!
Turnover rose from £15.76m to £16.8m, resulting in a £5.3m profit before tax (Year Ending 2018:£2.2m loss). This is down to the CVC investment each Gallagher Premiership stakeholder received, worth £12.8m.
The accounts said, relating to the CVC income, “this income is being recognised in the profit and loss over the next 48 months, with amounts relating to future periods being recognised as deferred income.”
This extra cash influx has come in huge use with the season put on hold due to the outbreak of COVID-19 and the subsequent issues it has dealt. The club announced measures this past week to put all staff on a 25% pay cut, in line with the other Premiership clubs who are all following similar procedures.
If you understood how the CVC money worked, and how quickly cash is burned when no games are being played, I’m sure you wouldn’t have made that comment, Carl.
Nobody wanted to have to make salary cuts.
— Lance Bradley #StayAtHome (@Lance_Bradley_) March 26, 2020
Why are Gloucester Rugby cutting wages when they’ve made over £5m profit this year?
- When the club loses out on games they take for very little merchandise. Bar takings, which usually surpasses £1m a year will take a huge hit with the clubs missing out on their remaining home games.
- BT, who have no games to televise, can’t afford to give cash to clubs with regards to their TV coverage either.
- Ticket income was nearly £4.5m according to the latest accounts, this would also take a massive hit given the lack of home matches, which also has a knock-on effect for hospitality and events at the stadium.
- Total staff costs in the last financial year (not just players!) amounted to £12.69m, including pensions and social security contributions.
Most clubs have hit profit this financial year due to the investment from CVC, and those reserves will be tested with no major income stream in the coming months.
“Main photo credit”